Small French Wineries' Export Strategies to China

Small French Wineries' Export Strategies to China

Article excerpt

Abstract

Over the past 2 decades, wine sales of the leading traditional wine producing countries (France, Italy and Spain) have faced increasing international competition. Sales have been eroded by encroachment from other beverages, changing lifestyles, demography, increased production of other European producers and the economic crisis. Conversely, French wine export has begun to increase with estimates for 2013 at 7,835 million Euros (OIV, 2014; XERFI 700, 2014). This is due to wine consumption increasing in the USA and China, two of the main export markets for France (De La Chesnais, 2013; Julien, 2013).

Business strategies appropriate of large scale wine producers from France, Italy and Spain, have been much studied and written about. In sharp contrast, little has been said about the strategies appropriate to smaller producers facing similar issues (Remaud et al., 2004; Coelho & Rastoin, 2006). This paper intends to contribute to the paucity of literature about small wine producers' export strategies. It therefore analyses the current situation in the South West of France, taking as example small independent wineries in Jurançon, a little known wine region nestled at the base of the Pyrenees Mountains. This paper therefore examines small wineries' strategies for exporting to China and details an empirical study of independent wine producers in Jurançon and suggests areas for further research.

The main findings point to the lack of a clear export strategy for small wine producers such as the Jurançon wine producers. Due to a lack of experience and knowledge of the Chinese market, most small wine producers did not see much potential and until recently were able to sell all of their production to the French market and did not need to investigate export possibilities. However, more recently, through an increasing demand for French AOC wine from the Chinese market, and other foreign markets, they have started to look at ways to produce more to be able to satisfy some of the demand.

As their export intentions are still in their initial stages, there are many complexities that still need to be researched before a clear strategy can be defined. However, some small Jurançon wineries are actively involved and are far ahead in the process of developing a strategy for export.

Keywords: French Wine, International Strategies, Chinese Market

1. Introduction

Over the past 2 decades, wine sales of leading traditional wine producing countries (France, Italy and Spain) have been increasingly eroded by New World Wines - mainly from Australia, New Zealand, USA, South America and South Africa (Remaud et al., 2004; Campbell & Guibert, 2006; Alonso & Northcote, 2009). Decreasing sales have also been due to an increase in sales of other beverages, changing lifestyles, demography and increased wine production of other European producers (Xerfi, 2014).

In the particular case of France, over the period 2005-2008, wine production fell just over 20% in volume terms (Pouch, 2011; OIV, 2014; XERFI 700, 2014). In 2008, still wine production in France was the lowest in recent years with approximately 33,000,000 hectolitres (XERFI 700, 2014). (This was mainly due to poor weather conditions in 2008). By the end of 2013, production had only slightly increased by +1.8% with a predicted +0.5% in 2014.

French wine exports hit an all-time low in 2009 at 5,551 million Euros (worldwide sales), however since then they have begun to increase with estimates for 2013 at 7,835 million Euros (OIV, 2014; XERFI 700, 2014). This is due to wine consumption increasing in the USA and China, two of the main export markets for France: 821 million euros in 2013 (China) and 1.049 million euros in 2013 (USA) (XERFI 700, 2014; De La Chesnais, 2013; Julien, 2013).

European wine consumption is still facing the impact of consumers spending less due to the recent economic crisis, and lowering consumption of wine in general (Blot & Janvier, 2012; XERFI 700, 2014). …

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